2024 (6) TMI 583 - AT - Service Tax

Exemption from service tax - Erection, Commissioning Installation Service - N/N. 11/2010 Service tax dtd. 27.02.2010 read with Circular No. 123/5/2010 TRU dtd. 24.05.2010 - HELD THAT - On examination of the contract awarded by M/s. GETCO to the respondent, it transpires that the scope of work is in connection with transmission line of electricity. In exercise of the powers conferred by Section 11C of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, the Central Government vide Notification No. 45/2010-S.T., dated 20-7-2010 has directed that the servicetax payable on transmission and distribution of electricity provided by the service provider, which has not been levied, shall not be required to be paid in respect of the taxable service under the category of Erection, Commissioning or Installation. The issue of eligibility of Notification No. 45/2010-S.T. in identical situation is no longer res integra and has been decided in favour of service providers such as the respondent, in a number of cases. The very same Notification was considered by the Bench of the Tribunal in the case of M/S KEDAR CONSTRUCTIONS VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLHAPUR 2014 (11) TMI 336 - CESTAT MUMBAI wherein the Bench has considered the activity of the appellant therein of construction of sub-station and also for maintenance of sub-station. The activity of respondent is clearly exempted from payment of Service tax. The impugned order is upheld. The appeal filed by Department is dismissed.

Summary

Issues Involved:
1. Eligibility for Service Tax Exemption
2. Applicability of Board Circular No. 123/5/2010-TRU
3. Interpretation of Turnkey Contract
4. Relevance of Previous Judgments and Notifications

Summary:

1. Eligibility for Service Tax Exemption:
The respondent, M/s. Adani Enterprises Ltd., filed a refund claim of Rs. 95,35,833/- u/s 11B of the Central Excise Act, 1994 read with Section 83 of the Finance Act, 1994, arguing that their services were exempt from service tax as per Board Circular No. 123/5/2010-TRU dated 24.05.2010. The adjudicating authority initially rejected the refund claim, but the Appellate Authority allowed the appeal, leading to the present appeal by the Revenue.

2. Applicability of Board Circular No. 123/5/2010-TRU:
The Revenue contended that the services provided by the respondent did not qualify for exemption under the said circular, as the activities undertaken were beyond those specified in the circular. The respondent argued that their activities fell under the exempted categories of "Laying of cables under or alongside roads" and "Laying of electric cables between grids/sub-stations/transformer stations en route."

3. Interpretation of Turnkey Contract:
The respondent's contract with M/s. Gujarat Energy Transmission Corporation Ltd. (GETCO) was on a turnkey basis, with a lump sum value segregated into various activities. The Revenue argued that this segregation implied separate contracts for different activities, which were taxable. The respondent maintained that the turnkey nature of the contract meant it should be considered as a whole, exempt from service tax.

4. Relevance of Previous Judgments and Notifications:
The respondent cited several judgments, including Hazirabaug Mining and Engineering Pvt. Ltd. Vs. C.C.Ex, and notifications like Notification No. 11/2010 - Service tax dated 27.02.2010, to support their claim for exemption. The Tribunal referred to these precedents and the Notification No. 45/2010-S.T., which exempts services related to the transmission and distribution of electricity from service tax.

Conclusion:
The Tribunal upheld the Appellate Authority's decision, finding that the respondent's activities were covered under the exempted categories specified in the Board Circular No. 123/5/2010-TRU and Notification No. 45/2010-S.T. Consequently, the appeal filed by the Department was dismissed, and the impugned order was upheld.